4 The Holy Trinity Of Economics 1. Resources are always and everywhere scarce, limited, finite2. There are more beneficial programmes than we have resources to do3. Choices must therefore be made and opportunities (alternatives that we might have done) forgoneApplies to all levels of human decision making:Individual decisions (e.g., time allocation)Health care decisions (AIDS vs. arthritis)Macro economy decisions (defense vs. health)Efficient allocation of resources is where opportunity costs are minimized (i.e. we are getting the greatest value from our resources)
5 Health Economic Evaluations Are Just One Part of Health Economics Other topics in health economics:optimal size of hospitals, optimal payment for physicians, optimal level of co-payment by patients,….
6 Economic Evaluation Cost analysis Cost-benefit analysis Do not include outcomesFocus on resource utilization and costsNot a full economic analysisCost-benefit analysisBoth costs and effects measured in $Rarely used in healthCost-effectiveness analysis (CEA)Cost-utility analysis (CUA)
7 Cost Effectiveness Analysis Bang for buckCompare programs in terms of their cost per outcome (effect)Single measure of effectNatural units (e.g. cases detected or prevented)Incremental formRatio of additional cost to additional benefit
8 Cost-Effectiveness Ratio Compares a specific (new) intervention to a stated alternative (old) intervention(Costnew – Costold) / (Benefitnew – Benefitold)Incremental resources required by the interventionIncremental health effects gained by using the intervention
9 Health economics and COPD: Overview of health economics.Program evaluation.Cost effectiveness of interventions.Perspective:GovernmentPatient.Society
10 Economic costs of COPD exacerbations (1). RUSIC prospectively tracked all exacerbations in a cohort of COPD patients in one year.Data on exacerbations and health care utilization captured.609 subjects followed.678 Visits, 245 ED visits.151 hospitalizations.Mittmann and FitzGerald et al Resp Med 2008
11 Economic costs of COPD exacerbations (2) Moderate exacerbation costs: $641 ($126 Out pt. and $515 ED)Severe exacerbation:$7,060 ± 10,826.National burden related to estimated 60,000 COPD hospitalizations in Canada: burden of ME and SE $646 million.Mittmann and FitzGerald et al Resp Med 2008
12 Annual cost of asthma in BC by year and cost component Cohort 155,000 asthma patients: (2006 CAN$)FitzGerald and Marra
13 Annual cost of asthma by category 94% of costs caused by uncontrolled patientsFitzGerald and Marra
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